Student Lending Analytics Blog

3,000 Miles And Three Presentations Later...A Surprise!

In case you were wondering about the absence of the SLA Blog at the end of last week, there was a flurry of activity on the conference front:

Highlights from House Hearing On Oversight of ATB Testing and Diploma Mills; 11% of Aid Recipients Enter Through A-T-B Tests; Tapes Played Of Test Administrator Giving Answers

Summary of written testimony: 

Mary Mitchelson, Acting Inspector General focused on three areas in her written testimony:  ability- to-benefit testing (ATB), on-line high school diploma mills and she also added eligibility problems associated with distance education:

Why Do Students Take Out Private Loans Instead Of Federal Stafford Loans?

Remember that analysis that Project on Student Debt completed recently that showed almost 2/3 of private loan borrowers had not maximized their federal loans?   Well that statistic came alive to me in the form of a call from Tom.  Tom (not his real name) attends a community college in the western United States and had found me through an internet search.  He thought I could help him get a private loan.  I asked him to describe his current situation so that I could learn more about him.  He mentioned he had received a Pell Grant and a Cal Grant but needed additional funding to cover his educational and living expenses (his school has COA of $16,000+ for students living on their own) and his Pell and Cal Grants got him about $5,000 of the way there in total. 

To which the logical next question was to ask "Why not take out a Stafford loan?"  Here is where it got interesting.  His initial answer was a curt one "because of the red tape."  Later he laid out for me the steps required by his institution to get a federal loan, which he thought would take three months from application to disbursement: